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Facilities Institute
July 9 - 12, 2012
www.NAEPnet.org
Houston, Texas
Understanding the
Construction Manager at Risk
Project Delivery Method
Presented by
Steve Skabla, Vice President
Chief Estimator/Preconstruction Manager
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Presentation Overview
• Overview of Various Project Delivery Methods
o
o
o
o
o
Traditional (Lump Sum) Bid
Competitive Sealed Proposals
Design/Build
Job Order Contracting
Construction Manager at Risk
• Explanation of Construction Manager at Risk
o Definition
o
o
o
o
Characteristics
Pros/Cons
Project Examples
Lessons Learned
• How to Evaluate Best Value
Facilities Institute
July 9 - 12, 2012
Houston, Texas
What is a “Project Delivery Method”
The process of how a project will be planned,
designed and built
OR
Procurement strategy for designing and
constructing a facility
OR
Means of contractually communicating
expectations and basis of reimbursement
OR
The process of managing how a project will be
planned, designed and built
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Overview of Delivery Methods
Traditional & CSP
Design/Build
Owner
Owner
A/E
General
Contractor
Bid
Traditional
Price only
Construct
CSP
Price and
Technical
Qualifications
Owner
A/E or
Consultant
Design/Builder
SelfPerform
Subcontractors
Subcontractors
Design
Job Order Contract
JOC
Contractor
Subcontractors or
Employee Crews
Select
Design
Construct
Price & Technical
Qualifications
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Select
Design
Price & Technical
Qualifications
Construct
Overview of Delivery Methods
Construction Manager at Risk
Owner
A/E
CM
Sub
Sub
Sub
Select
Design
Sub
Sub
Construct
Fees, general conditions and qualifications
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Construction Manager at Risk (CM at Risk)
• What to Expect from Your CM
o Provide constructability reviews
o Provide detailed cost estimates at Schematic Design, Design
Development and at Guaranteed Maximum Price (GMP)
o Deliver GMP prior to completion of Construction Documents
o Begin construction before design is 100% complete
o Bring best subcontractors and best prices to the project
o Control costs/budget
o Take a business risk
o Provide financial guarantees
o Act in the Client’s best interest
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Preconstruction (Not Just an Estimate & Schedule)
Budgeting
Solicitation
& PreQualification
Process
Bid Package
Development
GMP
Development
Value
Engineering
Options
Purchasing
Process
Scheduling
Over-theShoulder
Design
Reviews
Coordination &
3D Collision
Check
Constructability
Review &
Improvement
Site
Management
Planning
Team
Communication
Protocols
Site Logistics
OCIP/CCIP
Plan
Comprehensive
Planning &
Weekly &
Coordination
FF&E
Monthly
Reporting
Process
Severe Weather
Preparedness
Dependable
Budgets
& Schedules
Meeting
Life-Cycle
Coordination &
Management
Management
Analysis
Job Hazard
Analysis
Testing &
Commissioning
Process
Occupancy
Planning
Quality
Management
Process
Planning for
Service After
Completion
Facilities Institute
July 9 - 12, 2012
Houston, Texas
CM at Risk
PROS
• Flexibility in selecting a builder
• CM provides preconstruction
services and works in team
concept with A/E & Owner
• Usually brought on early in
design (program/SD)
• Constructability reviews at
each stage of documents
• Opportunity to phase/fast track
• Better opportunity to maximize
HUB/MBE subcontractor
participation through bid
package strategic initiatives
• Opportunity for bid strategies
on inflationary materials
• Reduces the risk of
proprietary specifications
• Change flexibility
CONS
• Price is not guaranteed at time
of selection
• Owner must have more
involvement in the process
• Difficult to evaluate actual cost
between CM at Risk
candidates
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Lowest Cost vs. Best Value
Best qualified firm will give you the most value for the 91%.
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Project Candidates for CM at Risk
Best Suited
• Large new or renovation
projects
• Schedule sensitive
• Difficult to define
• Subject to change
Least Suited
• Small or simple projects
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Example: South Texas Research Facility
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Texas A&M Univ., Veterinary Imaging & Cancer Treatment Center
Facilities Institute
July 9 - 12, 2012
Houston, Texas
CM at Risk Lessons Learned
• The best performers at CM at Risk are the same
best performers at CSP and hard bid.
• State procurement laws may vary the process.
o Example: For Texas, 100% CDs and public subcontractor proposals
on each package are required prior to any real work.
o It is more work, not less for the Architect and Contractor.
• Allow adequate time for review and approval of the
Guaranteed Maximum Price (GMP).
• Allow adequate time for the subcontractor selection
process by the CM and Owner approval
Facilities Institute
July 9 - 12, 2012
Houston, Texas
CM at Risk Lessons Learned
• Agree on the subcontractor selection criteria and
process early.
• The project design must be sufficiently advanced
to have accurate general conditions proposals in
the RFP.
• Clearly define what is to be included and
excluded from “general conditions” in the RFP.
• Lump sum general conditions - not cost plus.
o The most issues/problems.
o 90% of contract administrator or Owner’s representative’s time on
5% of cost.
Facilities Institute
July 9 - 12, 2012
Houston, Texas
CM at Risk Lessons Learned
• Draft a total project schedule, not just a
construction schedule.
• Give the CM the entire project budget. Tell the
CM what parts it is responsible for.
• Add example schedule, decision milestones
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Benefits of CM at Risk Delivery
Example: 1 Million GSF
Public Hospital
• 4-year project duration
• Items bought early
• Potential cost savings
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Pick the Right Delivery Method
• Before starting the selection process, determine
which delivery method will provide “best value”
• Factors to consider (add more):
o
o
o
o
o
Project size and complexity
Time allocated for the construction
Competitiveness of the current/local construction market
Desired flexibility
Availability of contractors and subcontractors in the local market
• After deciding on key factors, evaluate the various
delivery methods and formally adopt the method you
deem “best value.”
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Hand-out
Facilities Institute
July 9 - 12, 2012
Houston, Texas
Thank You
Steve Skabla
713.243.8301
[email protected]
Facilities Institute
July 9 - 12, 2012
Houston, Texas
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13_CM at Risk Delivery Method by Steve Skabla